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STATEMENT OF BASIC POLICY |
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UIC has always sought to conduct its business with honesty and integrity and in accordance with high moral, ethical, and legal standards. The fundamental principles on which UIC's Code of Business Conduct and Ethics (the "Code") and these Business Conduct Guidelines are based are as follows:
These Guidelines are applicable to all directors, officers and any full- or part-time employee of UIC (including those on assignment to direct and indirect subsidiaries and affiliated entities, such as PUI or ETI) and, as appropriate, our suppliers, subcontractors and consultants (sometimes collectively referred to herein as "employees"). "UIC" refers to United Industrial Corporation, and its direct and indirect subsidiaries and affiliated entities of UIC, at any level. In observance of these Guidelines, as in other business standards conduct, there can be no substitute for common sense. When applied by competent people with ethical standards, common sense goes a long way toward handling any situation. Thus, when reading and using these Guidelines, every employee should apply his or her common sense, reflecting the attitude of the letter AND spirit of the rules presented. These are the principles to which all UIC employees are expected to adhere and the standards by which employees must judge their own conduct and that of their organization. These Guidelines are working guides and not technical legal documents. Emphasis has been placed on brevity and readability as opposed to providing exact solutions for all potential situations. The goal is to enable employees to identify issues and know when to seek assistance in the resolution of particular matters. As noted throughout, employees are encouraged to develop familiarity with rules applicable to their business activity, seek training as appropriate, and consult their supervisors, the Law Department, the Chief Compliance and Ethics Officer or the Ethics Helpline when necessary to ensure they are complying with the law and acting in an ethical manner in their business dealings on behalf of UIC. Further, it is the duty of every employee of UIC both to conduct his or her work in compliance with the Code and to ask questions in advance of questionable conduct as well as to report immediately--without fear of retribution for such reporting -- any violations, intentional or otherwise. Failure to report any non-compliance will result in the appropriate disciplinary action. It will continue to be the policy of UIC to comply with all applicable legal requirements and high ethical standards in the United States and each country in which UIC conducts business. Because different business units of UIC contract with both the civil and defense parts of the federal government, UIC also has a special duty to the nation to comply with federal procurement laws. All UIC employees must comply with the Code, these Guidelines and the subsidiary Policies at all times and in all transactions, violations of which may result in, among other actions, merit increase impact, suspension of work duties, diminution of responsibilities or demotion, and termination of employment. Only the Board of Directors (or the Audit Committee, if such responsibility has been so delegated) may waive any portion of these Guidelines for executive officers or directors, including the chief executive officer, chief financial officer, comptroller or chief accounting officer. Any such waivers must be written, and disclosed as required by applicable law and/or stock exchange regulation. |
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DEFENSE INDUSTRY INITIATIVE |
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The Defense Industry Initiative (DII) is a consortium of U.S. defense industry contractors that subscribe to a set of principles for achieving high standards of business ethics and conduct. Since its creation in 1986, the DII has grown from 32 defense contractors to over 60, a resounding testimony to the need to create an organizational culture in which ethics is paramount. The DII adheres to the following simple, yet far-reaching, principles.
Signatories to the DII are assuming a leadership role in making these principles a standard for the entire defense industry and a model for other industries. By becoming a part of DII, UIC is striving to further its reputation as being an organization that provides high quality goods and services and offers advanced technology to our government and commercial customers worldwide, as well as UIC's commitment to the highest standards of ethics and integrity in the conduct of our business. UIC is proud to be part of such a worthwhile organization. |
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CONTENTS |
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Section A: Guidelines Applicable to All UIC Operations
Section B: Guidelines Relating to Transactions Involving the United States Government
Section C: Guidelines Relating to International Transactions
Section D: Compliance Programs
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| Section A: Guidelines
Applicable to All UIC Operations GUIDELINE 1
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| UIC and its employees and representatives shall comply with all applicable laws in performing their work for UIC. Discussion Compliance with both the letter and the spirit of applicable laws is fundamental to the concept of doing business properly. For purposes of these Guidelines, "law" includes regulations, and encompasses United States government, state, local, and foreign laws when applicable to our work. Even so, two points regarding the application of this Guideline should be particularly noted. First, overall legal and ethical requirements that apply to large segments of our business are addressed in these Guidelines, but the nature of this document and the breadth of our activities worldwide makes it inappropriate for detailed explanations of all applicable laws. Thus, the duty to obey the law includes the duty to be aware of other applicable laws. It is not intended that each member of the UIC organization should be a legal expert, but it is expected that each will keep current with the laws and regulations relating to his or her line of work and will check with the Law Department and, as appropriate, the Chief Compliance and Ethics Officer (see Guideline 41) when assistance is needed. It is the responsibility of each Manager and Site Manager to ensure that adequate information about the laws applicable to UIC operations is available, including appropriate training, to ensure that all employees under their supervision are aware of, or have access to, the information necessary to ensure continued compliance with laws. Second, any doubts as to the applicability of a particular law or regulation shall be resolved in favor of applicability and compliance, except where otherwise advised by the Law Department. Sometimes there may be a question as to whether a law applies to a particular situation. In those cases, advice should be requested from a UIC attorney. Further, as a general matter, it is UIC's policy to cooperate in any government investigations and inquiries. All subpoenas, information document requests, or other inquiries should be referred immediately to the General Counsel. |
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| UIC directors, officers, employees and representatives shall conduct their activities on behalf of the Company in an ethical manner, with honesty and integrity. Discussion Because ethical standards are not always as clearly defined as laws, situations more often arise where the ethical response is not clear. One of the purposes of these Guidelines is to provide guidance that will reduce the number of such situations to a minimum. Ethical behavior goes beyond strict compliance with applicable laws. Indeed, sometimes the law may seem to permit something that one might otherwise deem unethical. The goal is not simply to follow the legal rules that apply to UIC's business, but to behave ethically, whether the rule is clear, or whether there is a rule at all. Thus, UIC expects ethical behavior to achieve honesty and integrity in all business transactions. No book of guidelines can provide specific answers for all questions; therefore, each individual must accept the responsibility for his or her own actions. When faced with a situation where the ethics of a proposed action are unclear, employees should begin with an assessment of any legal rules that might apply -- is the situation similar to one that is clearly permitted or clearly forbidden under existing law? If there is no law, or, if the answer is still unclear, your colleagues, such as a supervisor or a peer, are available as ethical sounding boards. We can all benefit from the experience and knowledge of others in analyzing hard ethical questions. Finally, in every case where difficult choices are presented, apply the "newspaper headline test" by asking: "If my actions were reported on the front page of the newspaper and made known to my family and friends, would I be comfortable defending my decision?" If the answer is no, the proposed action probably should not be taken. The Chief Compliance and Ethics Officer and the Law Department are available to help analyze difficult ethical issues. As a final note, the fact that a particular activity "has always been done that way" does not mean the activity is right, or that it may properly be continued. Every action, whether new or "tried and true," should be tested against the Code and these Guidelines of legal and ethical behavior. See Also· Guideline 41 Chief Compliance and Ethics Officer |
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GUIDELINE 3
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| Every employee must ensure that company records accurately record and report all transactions; that all transactions are properly authorized; and that no false, misleading or incomplete entries are made. Every employee shall accurately record time as worked and shall charge that time to the account for which it was incurred. All expenditures incurred by employees that are to be reimbursed by UIC or which are charged to the Company shall be authorized, reasonable, accurately accounted for on the company's books, and shall relate directly to UIC's business needs. Discussion It is the policy of UIC to fully and fairly disclose the financial condition of UIC in compliance with applicable accounting principles, laws, rules and regulations and to make full, fair, accurate timely and understandable disclosure in our periodic reports filed with the Securities and Exchange Commission and in other communications to securities analysts, rating agencies and investors. Honest and accurate recording and reporting of information is critical to our ability to make responsible business decisions. UIC's accounting records are relied upon to produce reports for UIC's management, rating agencies, investors, creditors, governmental agencies and others. Our financial statements and the books and records on which they are based must accurately reflect all corporate transactions and conform to all legal and accounting requirements and our system of internal controls. All employees -- and, in particular, the chief executive officer, the chief financial officer, the comptroller and the principal accounting officer -- have a responsibility to ensure that UIC's accounting records do not contain any false or intentionally misleading entries. We do not permit intentional misclassification of transactions as to accounts, departments or accounting periods and, in particular:
Any effort to mislead or coerce the independent auditors or a member of internal audit staff concerning issues related to audit, accounting or financial disclosure has serious legal consequences for the perpetrator, including criminal sanctions, and for UIC and is strictly prohibited. If you become aware of any potential or actual violation of this policy, you must report the matter immediately to your supervisor, the Chief Compliance and Ethics Officer, the Law Department, or the Ethics Helpline (1-866-825-5483). Consistent with UIC's reporting and record keeping commitments, all employees should accurately and truthfully complete all records used to determine compensation or expense reimbursement. This includes, among other items, reporting of hours worked (including overtime), reimbursable expenses (including travel and meals), and sales activity. Specifically as it relates to time reporting, each employee should be aware that compensation costs are a major element of costs charged directly to UIC contracts and serve as the basis for allocations of overheads to specific contracts. It is each employee's responsibility to accurately charge hours worked to the project or account on which the time was incurred. Fraudulent or intentional mischarging of time can result in criminal charges, as well as company disciplinary actions. Accordingly, it is a condition of employment that employees adhere to the procedures for time charging that is applicable to their work site or organization. The requirements for accurate recording of charges for materials and other expenses are the same as for labor hours. Thus, charges for raw materials, components and subcontracted items or services, whether charged to a customer account or a company (overhead) account, must be fully documented and charged to the correct accounts. UIC employees shall ensure that such charges are reasonable, necessary, and authorized by appropriate Company officials. Reimbursable employee expenses relating to Company business likewise must be authorized, accurately recorded, and charged to the correct accounts. It is expected that these business expenditures will be reasonably incurred and directly related to UIC business. See Also
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| It is our responsibility as a company to ensure that our products are designed and manufactured to meet contract requirements, particularly the applicable certification, inspection, test, and quality criteria of our own and those of our customers. Employees are expected to be aware of and exercise this responsibility as required in our jobs. Discussion UIC's commitment to quality and performance includes the obligation to deliver products that meet our own and our customer's specifications, including identified quality and testing criteria. Thus:
This commitment is particularly raised with respect to transactions with the United States and foreign governments. See Also
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| Every employee is responsible for proper use and protection of UIC assets, which shall be used only for Company business. Discussion UIC's ability to function efficiently and profitably depends upon protection and proper application of company assets such as technology, facilities, equipment, cash, and the time and talent of employees. Such assets should be used only for company business. Employees should look for opportunities to save or better utilize company assets, whether through improved performance or other efficiencies. Every employee has a personal responsibility to protect company assets from misuse or misappropriation. These assets include tangible assets, such as products, equipment and facilities, as well as intangible assets, such as corporate opportunities, intellectual property, trade secrets and business information (including access to any non-public information as an employee of UIC). UIC's assets may only be used for business purposes and such other purposes as are approved by UIC. No employee may take, make use of, or knowingly misappropriate UIC assets, for personal use, for use by another, or for an improper or illegal purpose. No employee is permitted to remove, dispose of, or destroy anything of value belonging to UIC, including physical items, business records, and electronic information, in contravention to established policies, the Code or these Guidelines. No employee shall for personal or any third party's gain deprive UIC of any business opportunity or benefit which could be construed as related to any existing or reasonably anticipated future activity of the Company. Employees who learn of any such opportunity through their association with UIC may not disclose it to a third party or invest in the opportunity without first offering it to UIC. No employee may participate in an initial public offering or otherwise accept special investment opportunities from a supplier, vendor (including banks or financial advisers), or customer with whom UIC is doing business or that is seeking to sell products or services to UIC without first disclosing the opportunity to the General Counsel. See Also
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| Every employee must be free from any business or other relationship that might conflict with the best interests of UIC. Employees' relationships that are questionable must be reported to management for review by the Chief Compliance and Ethics Officer. Discussion UIC expects all employees to exercise good judgment and the highest ethical standards in their activities on behalf of UIC as well as in their private activities outside UIC. Particular care should be taken to ensure that no detriment to the interests of UIC (or appearance of such detriment) may result from a conflict between those interests and any personal or business interests which an individual employee may have. In particular, every employee has an obligation to avoid any activity, agreement, business investment or interest or other situation that might in fact or in appearance cause the individual to place his or her own interests, or those of another, above his or her obligation to UIC. Care should be taken about the appearance of a conflict since such appearance might impair confidence in, or the reputation of, UIC even if there is no actual conflict and no wrongdoing. While it is not possible to describe or anticipate all the circumstances and situations that might involve a conflict of interest, conflicts may arise where an employee, or any member of his or her family:
Employees and officers are expected to devote their full time and attention to UIC business during regular working hours and for whatever additional time may be required. Outside business activities can easily create conflicts of interest or diminish productivity and effectiveness. For these reasons, employees and officers should avoid outside business activities that divert their time and talents from UIC's business. Though UIC encourages professional activities and community involvement (Guideline 15), special care must be taken not to compromise duties owed to UIC. Employees and officers are expected to disclose the nature of any non-UIC activity for which compensation is received. Employees must obtain approval from the Chief Compliance and Ethics Officer and officers must obtain approval from the Board of Directors before agreeing to serve on the board of directors or similar body of a for-profit enterprise or government agency. Serving on boards of not-for-profit or community organizations does not require prior approval. However, if service with a not-for-profit or community organization creates a situation that poses a conflict of interest with UIC (for example, the organization solicits charitable contributions from UIC or purchases significant services from UIC), the Chief Compliance and Ethics Officer should be contacted for approval to continue such service. In addition, prior to seeking election or appointment to any public office, an employee must notify the Chief Compliance and Ethics Officer to clarify UIC's position in the event the candidacy is successful or the appointment is made. Written approval of the Chief Compliance and Ethics Officer must be obtained before any such appointment or election becomes effective. Subject to the limitations imposed by these Guidelines, each employee is free to engage in outside activities that do not interfere with the performance of his or her responsibilities or otherwise conflict with UIC's interests. Where activities may be of a controversial or sensitive nature, employees are expected to seek the guidance of the Chief Compliance and Ethics Officer before engaging in such activities. No employee may use his or her UIC position or title or any UIC equipment, supplies, or facilities in connection with outside activities, nor may any employee do anything that might infer sponsorship or support by UIC of such activity, unless such use has been approved in writing by the Chief Compliance and Ethics Officer. Employees should not solicit contributions or other support from fellow employees, or distribute non-work-related material to fellow employees, during working hours or in areas where work is being performed. No employee may accept payments, loans, guarantees of obligations (except from banks or other entities that provide such services in the normal course and at arms' length), or anything of significant value from any individual, organization or entity doing or seeking to do business with UIC. Any such offer, should be reported to the Chief Compliance and Ethics Officer. In all instances where the appearance of a conflict exists, the nature of the conflict must be disclosed to the Chief Compliance and Ethics Officer. Where there is a real or perceived conflict of interest involving a UIC director of the Company, the matter should be referred for resolution by the Chief Compliance and Ethics Officer for interpretation and discussion with the Board of Directors, or with the Audit Committee if such responsibility has been so delegated. See Also
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GUIDELINE 7 |
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| UIC's trade secrets, proprietary and non-public information, and similar information obtained from customers or suppliers, shall be protected from unauthorized disclosure. Discussion Safeguarding UIC proprietary data, non-public information, and trade secrets, protects UIC's competitive edge in the current business environment for both government and commercial sales. This information is just as much a company asset as buildings and equipment, and includes such things as proprietary software, labor rates, customer lists, specifications of proprietary processes, marketing plans, and much of the day-to-day information relating to our finances and products. Information that is oral, as well as written, is entitled to this protection if it is deemed trade secret, proprietary or non-public. Non-public information includes, but is not limited to;
All employees are responsible for guarding such information from unauthorized disclosure. Documents (including computer data) containing proprietary information must be kept secure and must be properly labeled when they are shared with third parties to preserve their non-public nature. Additionally, no disclosure of proprietary information, including product information or technologies, to anyone outside of UIC shall occur without a nondisclosure agreement executed between the parties. Disclosure of product information or technologies to foreign nationals in the course of employment or on extended visitor status is legally considered an export disclosure and is subject to additional restrictions. If there is doubt whether any particular information, written or oral, is confidential, it is the duty of a UIC employee, agent, or consultant to so inquire of the originator or other responsible employees, and to otherwise protect the information until told by an authorized person that it can be made public. No employee of UIC who is entrusted with information of a competitive or proprietary nature (about UIC, its suppliers or customers) shall disclose that information outside UIC, either during or after service with UIC, except in accordance with this Guideline or with written authorization of the General Counsel, or as may be otherwise required by law. Employees may not use competitive or proprietary information for their own personal benefit or the benefit of persons or entities outside UIC. UIC spends a considerable amount of money on research and development of new products and devices, as well as improvements on old ones, to gain an edge on our competitors. To protect this investment and to keep the result for UIC exclusive use, UIC secures protection through patents, copyrights and trademarks. Without the proper protection of UIC's proprietary information, the company could suffer loss of customer confidence, market share, competitive advantage and, ultimately, jobs. Employees must therefore assume responsibility for protecting certain information that they originate, create, possess, or to which they have access. We owe the same level of protection to customers and suppliers who entrust UIC with their valuable information. See Also
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| UIC policy prohibits receipt or use by its employees, agents, or consultants of competition-sensitive information when such possession or use is not consistent with law or with the United States government procurement system, or is otherwise improper. Discussion The receipt and use of competitive information is both proper and necessary in the ordinary course of business provided that such information is lawfully and properly obtained and, in the case of competitive information obtained or used in connection with business with the United States government, special government rules are followed. It is appropriate for UIC to stay current with competitive developments and to review all pertinent public information concerning competitive products (e.g., published specifications and price lists). Competitive-sensitive information may also be lawfully obtained and used for specific purposes such as extending credit and evaluating suppliers, and in performance of contracts. UIC may not, however, attempt through improper means to acquire a competitor's trade secrets or other proprietary or sensitive information, including information as to facilities, manufacturing capacity, technical developments, or customers. Improper means include industrial espionage, inducing a competitor's employees to disclose proprietary information, commercial bribery, and any other means that are not ethical. No perceived company benefit, competitive or otherwise, shall be accepted as justification for violation of this policy. Any employee who is uncertain as to whether the receipt or use of information is permitted by this policy should seek immediate guidance from your supervisor, the Law Department, the Chief Compliance and Ethics Officer or the Ethics Helpline. See Also
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| No gifts or entertainment other than promotional items of nominal value may be given or received by a UIC employee or any member of his/her immediate family to or from any customers, suppliers, or anyone in a business relationship with UIC. No gift may be offered or accepted to influence the business relationship. Further, no gift may be offered or accepted under circumstances which imply, or be of such value as to reasonably imply, that it is intended to influence the business relationship. The circumstances and amount of a gift or entertainment otherwise permitted under this Guideline must be customary and lawful in the country where such gifts or entertainment are given. Moreover, it is never proper to give anything of value to a customer or supplier to secure or retain business or to receive any other favored treatment.
Discussion This Guideline states the general policy of UIC with respect to all gifts and entertainment other than gifts and entertainment with respect to domestic or foreign government employees or representatives, which are governed by special rules and regulations. All federal agencies, many state and local governments, and many foreign governments have rules and regulations on this subject, and it is UIC's policy to cooperate fully with the implementation of these rules and regulations. Many commercial companies also have rules on this subject, and it is UIC's policy to cooperate fully with the implementation of any such rules. The giving or receiving of a gift other than promotional items of nominal value by a UIC employee might be perceived by the other party to a transaction, or by a third party, as affecting -- or intended to affect -- the judgment of the individual who receives the gift. For this reason, it is essential that UIC employees generally avoid becoming involved in giving or receiving business gifts of any value, and that in all cases gifts other than promotional items of nominal value must be declined or returned. In no event shall gifts of cash be offered or received by a UIC employee. Providing or accepting reasonable and customary business entertainment can be acceptable, except when dealing with employees or representatives of the United States government or a foreign government, where there are special rules and regulations that prohibit or restrict such activity. Moreover, a customer/supplier may have policies that prohibit or restrict such activity. For example, work sessions sometimes continue through meals and people who work together sometimes entertain each other socially. Where the meals or entertainment are reasonable and not prohibited by the customer's or supplier's policies, there is no objection to UIC personnel participating and either picking up the check or allowing the customer, supplier, or other party to do so, but the limitations of this Guideline, common sense, and the avoidance of any appearance of impropriety should always be kept in mind. In every instance, however, expenditures made for gifts or entertainment must be reported and recorded accurately on UIC's books. IIn some countries or in some businesses, it is customary for business people to give or receive gifts. Again, be aware that there are special rules and regulations that prohibit or restrict giving gifts to employees or representatives of foreign governments. Otherwise, such customs often symbolize a gracious approach to life and a normal way of doing business and are in no way intended to influence the recipient of the gift. UIC does not have any desire to cause embarrassment to an employee or to the person with whom the employee is dealing by requiring that UIC employees refuse to participate in such gift giving. Therefore, a gift may be given or accepted if the prior written approval of the UIC Chief Compliance and Ethics Officer is obtained. Whenever possible, such gifts when received should be treated as gifts to the company (e.g., as office decorations). If an employee is offered a gift that fails to meet the requirements of this Guideline by someone in a business relationship, whether received at home or office, the employee should let his/her supervisor and/or the Chief Compliance and Ethics Officer know immediately. If the gift is perishable or otherwise cannot be returned, arrangements should be made to donate it to a local charitable organization. Otherwise, it should be returned to the party who sent it. In either case, a letter should be written to the party who made the gift explaining what was done with the gift and explaining UIC's policy regarding gifts. Gifts that are prohibited directly also are prohibited if undertaken indirectly. A gift that could not be accepted by a UIC employee may not be accepted by a member of his/her family and a gift that should not be given to a customer may not be given to a member of his/her family. This Guideline does not govern payments, gifts, or entertainment with respect to government employees or representatives, either domestic or foreign. Any such payments, gifts, or entertainment are governed by Guideline 28 (Payments or Gifts to Government Employees) and Guideline c (Foreign Corrupt Practices Act). Any question concerning the propriety of a payment, gift, or entertainment with respect to domestic or foreign government employees or representatives should be considered under Guidelines 27 and 36, not under this Guideline. It is never proper to give anything of value to a government employee or representative, either domestic or foreign, with the intent to influence or reward an official act. See Also
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| UIC employees must deal fairly with UIC's suppliers, customers, competitors and other employees. Discussion Each employee shall deal fairly with UIC's suppliers, customers, competitors and employees. No employee should take unfair advantage through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practice. UIC respects the confidentiality and privacy of our suppliers and customers. Information about the Company's suppliers, customers, competitors and employees must be used in an ethical manner and in compliance with the law. Under no circumstance should information be obtained through theft, illegal entry, blackmail, or electronic eavesdropping, or through misrepresenting affiliation with UIC. Any competitive or proprietary information should not be used if it is suspected that such information has been obtained improperly. Similarly, each employee must respect and protect any competitive or proprietary information shared with the Company unless disclosure is necessary to comply with statutory requirements, subpoenas, court orders or other lawful process or properly authorized government investigations. This information should not be released without proper authorization and should be used for legitimate business purposes only. Employees should not divulge any proprietary information about their former employers, nor shall any employee, officer or director ever ask them to do so. Customers and potential customers are entitled to receive accurate information regarding prices, capabilities, terms and scheduling. UIC strives to produce advertisements that are fair, accurate and lawful. False or misleading statements to sell or market UIC products or services are to be strictly avoided. Immediate efforts should be made to correct any misunderstanding that may exist with a customer or potential customer. See Also
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GUIDELINE 11 |
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| Nothing of value shall be received by any officer, director, or employee or agent of UIC from, or paid, loaned, given, or otherwise transferred, directly or indirectly, to any owner, officer, employee, or agent of a customer or supplier either to secure or retain business or to receive any other favored treatment from the customer or supplier. Discussion This Guideline prohibits commercial bribery or "kickbacks" from being offered or accepted by UIC and its employees in any form whatsoever. Commercial bribery may be described as the payment of money or some other consideration to an owner, officer, employee, or agent of a third party, or to someone else on their behalf, for the purpose of influencing the recipient's actions in business dealings. Commercial bribery is illegal in many states in the United States and may also be in violation of certain federal statutes. Many foreign countries also have statutes prohibiting commercial bribery. Whether or not any such laws exist in a particular jurisdiction or are applicable to a particular transaction, UIC officers, employees, agents, and representatives are absolutely prohibited from offering or accepting commercial bribes in any form. A commercial bribe seldom is paid openly. For this reason, UIC's business practices are intended to reduce the likelihood that payment subterfuges will succeed. To avoid circumstances that would make the payment of a bribe easier or might give the appearance that a bribe had been paid, the following rules shall be followed: A. Sales
B. Purchases
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| To the maximum practicable extent, materials, supplies, equipment, consulting, and other services shall be acquired from qualified suppliers who offer UIC the best value, performance at the lowest cost, and that meet UIC's requirements for quality, performance, and delivery schedule. Discussion UIC's ethical standards extend to our practices in source selection, negotiation, award, and administration of all purchase transactions. Full and fair competition is obtained to the extent feasible for all commercial and government work, and purchase transactions shall comply with applicable prime contract requirements and government regulations as well as company policies and procedures. Suppliers (both present and prospective) shall be notified of UIC's expectations of ethical behavior in its supply relationships. See Also
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| UIC shall comply fully with applicable antitrust and trade regulation laws. Discussion UIC believes in an economic system based on vigorous competition - free from collusion and unreasonable restraints - is the best mechanism for ensuring the production of high quality, well-priced and innovative products and services. Moreover, failure to comply with antitrust and other trade regulation laws in every jurisdiction in which UIC does business could result in serious consequences both for UIC and the offending individuals - including significant civil and criminal penalties. Antitrust laws forbid agreements and practices that restrain trade, such as price fixing, bid rigging, market allocation, and supplier or customer boycotts. They also forbid predatory pricing, i.e. pricing initiatives intended to drive a competitor out of a market or out of business. Similarly, disparagement of or misrepresentations about competitors and their products are antitrust violations. Stealing trade secrets, bribery, and kickbacks, in addition to the other laws and company policies they violate, can also violate antitrust laws. Any agreement or understanding among competitors that restrains the natural operation of the market is suspect. Violations can result in severe penalties for the company, fines and prison for individuals responsible for illegal activity. The antitrust laws also apply to international transactions affecting imports into and exports from the United States. A few other countries, particularly in Europe, also have antitrust laws. Therefore, it is UIC's policy to compete solely on the basis of its superior and innovative products and services, through the efforts and contributions of its employees and to avoid improper actions that unreasonably restrain trade. Every UIC unit and employee is expected to support UIC efforts to compete vigorously in the marketplace in compliance with both the letter and the spirit of all applicable federal, state and foreign antitrust laws. Antitrust and trade regulation issues are very complex. Determining what actions unreasonably restrain trade or are otherwise improper will depend on the structure of the market and a number of other factors. Whenever any doubt exists as to the legality of any communication, action, arrangement or transaction, please contact the Chief Compliance and Ethics Officer immediately. To avoid even the perception of unlawful conduct, employees should avoid:
In addition, the following practices should not be engaged in without advanced written approval by the Chief Compliance and Ethics Officer:
The Company maintains a Policy of Antitrust and Trade Practices Compliance with more detailed guidelines for compliance with this complex set of laws and regulations, which can be obtained from the General Counsel. If your position involves setting prices or other terms or conditions of sale, marketing, purchasing, participating in trade associations or standards-setting groups, or working on acquisitions, divestitures, joint ventures or licensing, you have a heightened obligation to be familiar with antitrust and trade practices compliance, and the Company's policy. Because these laws can apply to even casual information exchanges, UIC employees who are active in industry trade associations must be cognizant of the laws and avoid situations where there is discussion of future pricing, competitive initiatives, and other information that might appear to relate to price fixing, market allocation, and other violations of law. See Also
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| UIC employees shall not use or share inside information that is otherwise not available to the general public, for personal gain, or the gain of others. Discussion No employee may trade in securities while in possession of material inside information or disclose material inside information to third parties ("tipping"). Material inside information is any information that has not reached the general marketplace and is likely to be considered important by investors deciding whether to trade (e.g., earnings estimates, significant business investments, mergers, acquisitions, dispositions and other developments, expansion or curtailment of operations, and other activity of significance). Using material inside information for trading, or tipping others to trade, is both unethical and illegal. Accordingly, no employee may:
Where material inside information is permitted to be disclosed, the recipient should be advised of its non-public nature and the limitations on its use. Any questions as to whether information is material or non-public should be directed to the General Counsel or another Company attorney. Additionally, all employees, officers and directors must provide full, fair and accurate disclosure in all government filings and public communications. See Also
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GUIDELINE 15 |
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| UIC employees are encouraged to be good citizens and to take an active role in civic and political life, but an employee should make it clear that he or she is a private citizen and not acting for UIC. Discussion UIC desires to help promote the well being of communities in which UIC maintains operations and to meet the responsibilities of good citizenship by appropriate participation in public affairs. UIC, therefore, has personnel whose responsibilities include civic and charitable activities on behalf of the company. In addition, all employees of UIC are encouraged to participate in civic and community activities of a political, educational, charitable, religious, or social nature, providing it does not interfere with their work assignments. Apart from those persons who are specifically authorized to act on behalf of the company in such matters, care should be exercised by any employee involved in political or civic activity to be clear that he or she is acting as an individual, and not as a representative of UIC. See Also
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| No funds, assets, or facilities of UIC shall be contributed, provided, or loaned, directly or indirectly, to any political party or to the campaign of any person seeking political office, or expended in support of or in opposition to such a party or person anywhere in the world whether or not such action would be legal in the state or country in which it is made. No facilities of UIC shall be used for partisan purposes in the operation of any political campaign.
Discussion Corporations are prohibited by statute from making political contributions to candidates in all federal and most state elections. In some countries and states, such as Maryland, political contributions by corporations are permitted. Nevertheless, it is the belief of UIC management that, unless specifically approved by the President of UIC, it is in the best interest of UIC and its stockholders for the Company, as a general rule, to refrain from making political contributions even when such contributions are lawful. A political contribution to a candidate or political party outside the United States may also constitute a violation of the United States Foreign Corrupt Practices Act. UIC encourages employees as individual citizens to make personal political contributions. Employees who do so shall avoid any suggestion that such contributions are from UIC or have Company endorsement. Under no circumstances, however, shall any employee be compensated or reimbursed by the Company in any way for any political contribution. Similarly, no employee shall be either favored or prejudiced in any condition of employment or promotion as a result of making or failing to make any such contribution. UIC has established a Political Action Committee (PAC) to assist UIC and its employees in pooling our resources to reach members of the U.S. Congress who support UIC programs goals in the Congressional Budget Process. Every year major programs, critical to all of us at UIC, are threatened by a lack of funding. The PAC exists to:
Participation in the UIC PAC is completely voluntary, and any UIC employee or individual who is a U.S. citizen or an alien with permanent resident status may legally contribute to the UIC PAC, although only certain employees ("executives or administrative" personnel, who are defined as employees who are paid on a salary rather than an hourly basis and have policymaking, managerial, professional or supervisory responsibilities) may be solicited for contributions. See Also
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| UIC endorses the principle that every individual must have a fair and equal opportunity to achieve that individual's own full potential. UIC shall take affirmative action to ensure that equal employment and advancement opportunities are provided for all personnel and that the work environment is free of all forms of harassment and discrimination. Discussion In the United States, federal and many state laws and regulations require all employers to provide equal employment opportunity on the basis of qualification and merit without regard to race, creed, color, sex, age, disability, national origin, veteran or military status, marital status, or sexual orientation. As a federal contractor, UIC is required to take specific affirmative action steps to assure the realization of this equal opportunity policy. In order to comply with these requirements, a written Affirmative Action Plan that meets the requirements of applicable laws and regulations must be maintained for each employment location with over 50 employees. Included in UIC's policy against unlawful discrimination in the workplace is an absolute prohibition of harassment, including sexual harassment. Both UIC policy and federal law forbid sexual harassment of any employee by any other employee. Sexual harassment is broadly defined as any unwelcome sexual advance, request, or any verbal or physical conduct of a sexual nature when submission to such advance or conduct is made an explicit or implicit term or condition of employment or advancement, when it interferes with an individual's work performance, or when it creates an intimidating, hostile, or offensive work environment. See Also
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| Sound and lawful environmental practices are the responsibility of each UIC employee. Due compliance with applicable national and local environmental regulations is required. Primary responsibility for protection of the environment, both inside and outside UIC facilities, rests with the UIC manager in charge of the facility. Discussion As a good corporate citizen of the communities in which it operates, UIC shall be conscious of the effects of its operations on the environment -- land, water, air, and sound -- in which it operates and shall comply with applicable national and local laws and regulations relating to protection of the environment. Every employee is expected to adhere to the spirit, as well as the letter of this policy. Managers have a special obligation to keep informed about environmental risks and standards, and to advise higher management promptly of any adverse situation that comes to their attention. UIC has assigned AAI's Manager, Health, Safety and Environment, to receive such reports, as well as to provide advice and information to our management, in coordination with company attorneys. The Manager, Health, Safety and Environment is David Minford and can be contacted at 410-628-6704. |
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| UIC and its employees are responsible for maintaining a safe and healthy work environment, and for compliance with all federal, state, and local health and safety laws and regulations. Discussion Every employee is responsible for helping to keep UIC a safe and healthy place to work. Observe posted notices, warnings, and policies intended to protect employees on the job. Safety or health concerns should be reported immediately to appropriate management personnel. Accidents or injuries on the job should be reported promptly the appropriate management personnel and to the Safety, Health and Environment Manager or the equivalent position in each subsidiary or location. |
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| UIC is responsible and accountable for all electronic mail within its system. Thus, UIC's electronic mail systems shall not be used in an illegal, obscene or wrongful manner. Discussion UIC Electronic mail (e-mail) and access to the Internet, whether used for UIC or personal purposes, should never be considered private. UIC may access an employee's e-mail messages or files for any number of valid reasons, including but not limited to the need to investigate illegal or unlawful acts or misconduct, or in order to comply with legal process. UIC also reserves the right to monitor electronic communications at its discretion, with or without notice, and use of UIC's electronic communications grants consent by the employee to the review and disclosure of any information sent, received or stored in UIC's systems. Personal use of e-mail for incidental purposes, though not encouraged, is tolerated so long as it is minimal, does not interfere with one's job performance, is not disruptive to the work environment, and does not adversely affect the performance of the e-mail system. UIC e-mail should never be used for commercial purposes (other than UIC business) or personal monetary gain. E-mail leaves a documented record; therefore, messages sent even in jest may carry with them significant legal implications. For example, UIC e-mail cannot be used in a manner that infringes on third party intellectual property (e.g., copyrights), or to display or transmit sexually suggestive images, jokes, messages, cartoons or any communications containing ethnic slurs, racial epithets or anything that may be construed as harassment or disparagement of others based on race, national origin, gender, sexual orientation, age, disability or political beliefs. UIC employees must use a common sense approach to all e-mail messages sent, stored or received. If you would be uncomfortable if your friends or family knew of your e-mail activities, or if your e-mail was published in the newspaper, think twice and do not send the e-mail. Internet access is established and sanctioned for employees to perform research and evaluation, educational needs, and engage in communications to achieve UIC business missions. While personal use is not prohibited, it should be very limited and must not interfere with normal business activities, solicit or address others regarding any outside business activity, commercial, sexual, religious or political causes or embarrass or disparage UIC. Internet users are prohibited from viewing, transmitting or downloading material that is obscene, pornographic, threatening, or racially or sexually harassing. As with e-mail, the Internet should not be used to access harassing or obscene materials. UIC proprietary or competitive-sensitive information, export-controlled technical data and non-public Company information must be protected (e.g., encrypted) during transmission by e-mail, and you should consult with the appropriate Information Technology Department for guidance. All information stored and transmitted via e-mail must comply with all contract requirements, U.S. Government export control laws, and any other UIC policies regarding such transmissions. To ensure a virus-free environment, no files may be downloaded from the Internet without prior authorization from the Information Technology Department. Any files approved for downloading from the Internet must be scanned for viruses, using UIC's standard virus detection software. See Also
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| UIC employees shall maintain books and records in strict compliance with UIC's policy on management, retention, and destruction of books and records. Discussion UIC's policy for management, retention, and destruction of records ensures both adequate space for the storage of current books and records and accounts for business, customer, and legal considerations. UIC employees will receive training on this policy upon employment and annually thereafter. Compliance with UIC's records retention policies and procedures is mandatory. Destroying or altering a document with the intent to impair the document's integrity or availability for use in any potential official proceeding is a crime. Prior to the destruction of corporate records, all employees must consult an appropriate supervisor or manager to ensure compliance with these policies. Documents relevant to any pending, threatened, or anticipated litigation, investigation, or audit shall not be destroyed for any reason. Any belief that Company records are being improperly altered or destroyed should be reported to a responsible supervisor the Chief Compliance and Ethics Officer , or the Ethics Helpline (1-866-825-5483). See Also
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GUIDELINE 22 |
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| Any UIC employee required to provide information or data to support company certifications must ensure that the information or data provided is accurate. Discussion In light of recent scandals, a law called the Sarbanes-Oxley Act of 2002 (Public Law 107-204) made significant changes in the regulation of corporate activity of publicly traded companies such as UIC. As a result, the company CEO and CFO must certify the contents of the company's quarterly and annual reports. These reports set forth summaries of the Company's financial position and results, as well as refer to certain of the factual circumstances supporting or requiring the financial position or result. Certifications are also required to provide assurances about the Company's internal controls and disclosure controls and procedures. It is of utmost importance that any UIC employee providing information or data, whether factual or financial, related to these certifications and our quarterly and annual reports ensure that the information or data provided is current, accurate and complete. Should any question arise, it is equally important to raise the issue and seek resolution in a timely manner, and not wait until the last moment before a disclosure deadline. See Also
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B: Guidelines Relating to Transactions Involving the United States Government GUIDELINE
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| No UIC employee shall, in connection with any transaction with the United States government, engage in any conduct in violation of law or otherwise inconsistent with standards of honesty and integrity. Discussion TThe purpose of this Guideline is to affirm required standards of conduct with respect to transactions with the United States government. In this area, even the appearance of impropriety can erode public and government confidence in UIC and in the government procurement process. This Guideline, and the other Guidelines in this Part B, shall be complied with in all transactions involving the United States government. For example, a contract with a municipal entity, such as a transit authority, may be funded with federal grant monies, which in turn, may impose certain United States federal rules upon performance of the contract. Each Manager with Government contract responsibilities shall take timely action to ensure compliance with these Guidelines, including prompt remedial action when required. Each Manager will be expected to consult with the Law Department concerning applicable legal requirements. |
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| UIC employees involved in UIC's transactions with the United States government or which are based upon United States government funds shall ensure that all statements, communications, and representations made on behalf of UIC are accurate and truthful. Discussion Government transactions often require submission of substantial information about the Company, our employees and our products. Submission of misinformation, whether by mistake or intentionally, particularly when it misleads the government, is a serious concern for UIC. It is the Company's intent to submit complete and accurate information when required by the government. Thus, in connection with any communications to be made to the government, UIC employees shall be accurate and truthful, including but not limited to the following obligations:
Because UIC is a large company, there are times when it can be difficult to know whether all required information has been identified and provided to the government. It is the responsibility of all employees involved in assembling, reviewing, and submitting information to the government to ensure, to the best of their abilities, that all pertinent information is located and provided. Failure to meet the requirements of this Guideline exposes the Company to contractual problems, as well as civil and criminal penalties for the Company and any individuals involved. See Also
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GUIDELINE 25 |
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| UIC employees shall, when required by a solicitation, submit current, accurate, and complete cost or pricing data to the United States government, and shall ensure that such data is updated to the date any certificate regarding that data is signed. Discussion The Truth in Negotiations Act requires contractors to submit cost or pricing data before award of certain negotiated prime contracts, subcontracts, or modifications thereof, including modifications incorporating negotiated overhead rates. When required, contractors also must execute a Certificate of Current Cost or Pricing Data which certifies that, to the best of the contractor's knowledge and belief, the cost and pricing data submitted to the government are current, accurate, and complete as of the date of the certificate. "Cost or pricing data" is all data which a prudent buyer or seller would reasonably believe has an impact on contract negotiations. This is a significant departure from normal commercial practice, and effectively requires UIC to produce all data in the company's possession which the government might find relevant or useful, whether or not the data was used or relied upon in preparing the UIC proposal. Thus, when negotiating contracts subject to this law, care must be taken to ensure that all required data have been identified and disclosed to the government prior to the execution of a Certificate of Current Cost or Pricing Data. This includes the responsibility to ensure accuracy at initial bid submission and to ensure that all updates and changes to that information are provided to UIC's contracts function prior to contract award, so that the final certificate can be signed. The same level of care shall be exercised when preparing such data in support of modifications and subcontract proposals under government prime contracts. Cost or pricing data is not required in a number of situations:
Consult with the Law Department if there is a question about whether a particular procurement is subject to these rules. Submission of inaccurate information can have negative consequences for the affected contract, ranging from a reduction in the contract price due to defective cost or pricing data (plus penalties) to contract termination. Moreover, where a contractor knowingly or recklessly fails to provide current, accurate, and complete data, the government may charge the contractor and individuals with violating various criminal statutes. Given these potential consequences, UIC policy is to disclose all data reasonably related to a proposal, even if the data helps the government negotiate a lower price. See Also
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GUIDELINE 26 |
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| UIC employees shall charge only properly incurred costs of labor and materials to government contracts, shall charge properly incurred costs to overhead accounts which apply to government contracts, and shall ensure that unallowable costs are identified, segregated, and not charged to the government in any form. Discussion UIC policy is to record accurate information for labor, materials and overhead costs so that no improper charges are submitted to the government for payment. It is important to keep in mind that even overhead accounts are part of UIC's billings to the government, and thus that improper charges to overhead are just as much a violation of government and UIC rules as direct charges. Such mischarging may result, for example, from the improper execution of employee timecards, charging improper or unsupported costs to overhead, incorrectly classifying costs when incurred, or improperly shifting costs between contracts. The government has enacted Cost Principles which identify costs that are "unallowable" even if incurred in connection with a government contract, either as a direct charge or as an overhead expense. These principles do not bar UIC from incurring such expenses, but require the company to identify and segregate such costs to ensure they are not passed on to the government. Examples of such unallowable costs include "unreasonable" travel expenses (in excess of government travel limits), charges for alcoholic beverages, most contributions and donations, certain expenditures for employee morale such as recreation costs, tickets to the theater, sporting events, and gifts. Thus, it is very important that all UIC employees follow the procedures for identifying such costs when they are incurred, so that our accounting organization can prepare accurate invoices. See Also
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| Every employee must comply with the requirements of the procurement integrity law and other government laws and regulations dealing with improper disclosure of information, and employment discussions with government employees working on procurements involving UIC. Discussion Although there are already general conflict of interest and confidentiality laws that address these matters, the Procurement Integrity law places special restrictions on the hiring of government employees, AND on access to contractor and government information relating to procurements. The law restricts two general types of conduct by contractors and government officials:
The law contains numerous detailed definitions of important terms that cover or omit classes of individuals and transactions. For these reasons, every employee responsible for government procurements is required to familiarize themselves with the procurement integrity rules in FAR § 3.104, and to consult with a Company attorney, the Chief Compliance and Ethics officer or the Ethics Helpline when any questions arise. UIC's ethical principles require that we avoid even the appearance of seeking information in violation of the law. Thus, every effort shall be made to limit requests for information to those permissible under the law. Likewise, ALL discussions relating to potential employment of present or former government officials, whether initiated by UIC or by the government official, shall be referred to the Human Resources Department to ensure appropriate measures are taken to avoid violations of the law. The original procurement integrity rules left contractors and government officials reluctant to talk to each other when procurements are pending, which significantly reduced the helpful exchanges of information with the government. The revised law encourages continued discussions, as long as they do not touch upon the defined "source selection information" and "contractor bid or proposal information." It is UIC's policy that after a solicitation has been published, there will be no contact with the government customer, unless initiated by the customer and coordinated through Contracts or a company attorney. UIC employees are encouraged to seek approval for such communications when appropriate. See Also
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GUIDELINE 28 |
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| No money or anything else of value shall be paid, loaned, given, offered, promised, or otherwise transferred, directly or indirectly, to any federal, state, or local government official or employee, or to any entity in which such an official or employee is known to have an interest, for the purpose of (1) obtaining, retaining, or directing business, (2) affecting the conditions for doing business, (3) influencing an official act, or (4) rewarding an official act.
Discussion TThis Guideline prohibits anything in the nature of a bribe, illegal gratuity, payoff, or kickback to be paid to any government official or employee to influence business decision or to reward them for an official act. Such activity is illegal under United States law. It is UIC's policy that nothing should be done that may give even the appearance of improperly influencing a government official or employee in violation of these laws. The consequences of violating these criminal statutes can be severe for both UIC and the individual involved. It must be recognized that this Guideline (like the criminal statutes) is absolute and that, except in the very limited areas noted below, there can be no exceptions, regardless of the amount or form of payment involved or the ingenuity used in establishing a scheme or arrangement to conceal the true nature of the payment being made. SSpecifically, under federal law, it is a crime to corruptly give, offer, or promise anything of value to a public official with the intent to influence an official act. In common terms, this would be known as bribing a public official. It is important to understand that the mere offer of a bribe is against the law, even if the bribe is not accepted. It is also a crime to give, offer, or promise anything of value to a public official for or because of any official act performed or to be performed by the official - in other words, to reward a public official for an official act with a gratuity. The distinction is that a bribe induces an official act, whereas an illegal gratuity rewards an official act. Federal procurement regulations also contain restrictions on gratuities. The Government may terminate a contract for default if it determines that the contractor offered or gave a gratuity to a government employee with the intent to obtain a contract or favorable treatment under a contract. A violation of this prohibition could also result in the company's suspension or debarment from government contracting, a result that would be devastating for the company and all UIC employees. Notwithstanding the foregoing principles, the applicable laws and regulations do allow government employees to accept some low value items that are deemed not to threaten their impartiality. Each agency has the authority to establish rules for the acceptance of such items, but the general rules established by the Office of Government Ethics provide that government employees may accept items of no more than $20 in value daily (with a $50 yearly limit) from the same source. The effect of these rules is to limit UIC employees to offer low value items such as coffee mugs and promotional items. Also, minimal refreshments in connection with a business meeting may also be offered and accepted. Meals, however, are not allowed. UIC employees shall ensure they are familiar with the gifts and gratuities rules of each agency they work with before offering such items. UIC employees should be warned that the rules and regulations that apply to giving anything of value to government employees or representatives, both domestic and foreign, are complicated. It is never proper to give anything of value to a government employee or representative with the intent to influence or reward an official act. If a UIC employee has any doubts about the propriety of a payment or gift to a government employee or representative, he or she should contact his or her supervisor, the Chief Compliance and Ethics Officer, the Ethics Helpline (1-866-825-5483) or the Law Department. See Also
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| Consistent with Guideline 4, UIC employees shall ensure that its government contracts are fully performed in accordance with their terms and conditions. Inability to achieve full compliance shall be addressed openly within UIC and with the government. Discussion Compliance with contract terms and conditions is particularly important when dealing with the government. Failure to disclose a known material deviation from the requirements of a government contract, including product substitution, may be considered criminal fraud. Product substitution involves such activities as failing to deliver supplies that have been paid for under a contract, delivering similar goods that have been made from lower quality materials, delivering materials that have not been tested as required, and providing foreign-made materials when domestic materials are required by the contract. The intentional substitution of products required under a contract, or the intentional failure to provide the required quality control, may constitute a false statement or false claim against the government. Accordingly, no substitution of materials or products, or change in testing requirements or quality controls specified in a government contract, should be made without the approval of an authorized government representative. See Also
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GUIDELINE 30 |
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| Former government employees are limited in their interactions with the government on behalf of new employers, particularly when such interaction relates to issues handled while still employed by the government. Discussion It is unlawful for any former officer or employee of the United States government to represent UIC in dealings with the government in connection with any matter in which that person participated personally and substantially while employed by the government. It is also unlawful for anyone who has been employed as an officer or employee of the United States government, within two years after the person's government employment ceased, to represent UIC in connection with any matter which was under the person's official responsibility. Further, it is a crime for any officer or employee of the United States government to participate in a matter involving any firm with whom that person is negotiating or has any arrangement concerning prospective employment. Under most of these laws, UIC can hire former government employees, but cannot ask them to perform certain tasks which would violate the law. As noted above under procurement integrity, however, persons subject to those special restrictions cannot be hired by UIC at all, for at least one year after they served in a position that subjected them to procurement integrity restrictions. Subsequently, Human Resources and the company attorneys must evaluate every prospective hiring of former government employees, whether as UIC employees, consultants or subcontractors for compliance with applicable conflict of interest laws. See Also
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| All lobbying of government employees, whether in the legislative or executive branch, shall be conducted and paid for in accordance with applicable laws. Discussion Most employees of UIC are not involved with lobbying activities on behalf of the company. Persons specifically hired for this purpose typically perform such work. Nonetheless, there may be times when UIC employees are asked to participate in lobbying activities. The Byrd Amendment prohibits the use of government funds to support lobbying of the government in connection with the award of a contract or modification. It requires that costs associated with lobbying activities be tracked and treated as unallowable, and corporate profits and other funds derived from purely commercial activity must be used to pay for such activities. Some government procurements require certifications regarding compliance with these rules, and disclosure of activities performed. Certain exceptions apply for essentially routine business or responding to government inquiries. The Lobbying Disclosure Act requires filings and disclosures about the overall lobbying activities of UIC. This law again does not affect most employees, although again it establishes certain rules about record keeping and funding. In each case, where a UIC employee understands or believes that he or she is participating in lobbying activity, such as when you are asked to contact a member of Congress or an agency employee to lobby about a procurement, consult your supervisor, the Chief Compliance and Ethics Officer, the Law Department or the Ethics Helpline for appropriate direction on charging of time and expenses. See Also
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GUIDELINE 32 |
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| Government contracting requirements for use of subcontractors and consultants shall be followed by UIC. Discussion Specialized laws apply to supplier and consultant relationships when UIC is operating under a government prime contract. As part of the government contracting requirements, most government prime contracts require that a number of prime contract provisions "flow down" to subcontractors. It is UIC's responsibility to ensure that all such required clauses be included in the appropriate subcontracts. This is chiefly the responsibility of UIC contracts and purchasing personnel. Under government contracting requirements, acceptance of bribes and kickbacks from suppliers (violations of both state law and UIC policy) become federal criminal violations if the supplier-related bribes or kickbacks relate to a government prime contract, under the Anti-Kickback Act. The Act defines a kickback as anything of value provided for the purpose of obtaining, or attempting to influence, the award of a contract or subcontract. Procurement Integrity rules also apply to UIC's subcontract relationships. UIC cannot use a subcontractor or consultant to accomplish what we cannot do ourselves under the law. Thus, a consultant on a particular procurement that obtains bid or proposal information about a competitor for UIC, or who offers a job to a government evaluator, not only has violated the law, but also may implicate UIC in the violation. Consultants and subcontractors, if they are (or employ) former government employees, are subject to the same conflict of interest restrictions they would face if they were hired as UIC employees. The contractual relationship and lack of a direct contractual relationship with the government will not avoid a consultant's conflict of interest for work on certain tasks relating to his or her government employment. See Also
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| UIC employees shall take all necessary and appropriate measures to protect classified information received from any source. Discussion At times UIC may perform government contracts that entail access to classified information. Only employees with valid clearances are allowed access to such information, and all such information shall be handled in conformance with applicable laws and regulations. These restrictions apply to any form of information, whether written, oral, or electronic. Foreign nationals are normally prohibited access to work areas, documentation, records, design development and test areas where classified work is in process. Under limited circumstances, foreign nationals are granted limited access to classified information. This occurs only when UIC has an export license or other approval for the release of the technology from the relevant U.S. government authority, and a confirmation from the foreign government advising that the foreign national has been approved for access to classified programs. UIC has an established set of procedures to handle U.S. Government classified, all Foreign Government classified, and some U.S. Government unclassified but sensitive material. This includes retention, transmission, destruction and reproduction restrictions. Any questions regarding the handling of classified information should be directed to the employee's supervisor, the Chief Compliance and Ethics Officer, the company Security Officer, the Law Department the Ethics Helpline (1-866-825-5483). Caution: If you engage in any such discussions, do not reveal the content of the classified information without clearance confirmation. See Also
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| Any activity relating to the manufacture, use, purchase, possession, distribution, or transportation of illegal substances in the workplace is strictly forbidden. All employees are subject to periodic random drug testing. Discussion Illegal drug-related activity on Company premises is a violation of law that will subject a UIC employee to the severest possible penalties, in addition to the consequences of violating federal and state law. UIC is obligated and committed to all good faith efforts necessary to maintain a drug free workplace. Findings of illegal drug-related activity can imperil UIC's government and other contracts, as well as endanger the safety of its employees and visitors. UIC's policy, therefore, is to fully cooperate with the government on such issues, including compliance with the requirement to notify the government of drug-related violations by employees. Substance testing is a condition of employment. UIC has the right to request employees to submit to testing or examination for drug misuse. At a minimum, testing shall be conducted prior to employment, on a random basis, post workplace accident, return to work after absence for disability, when a reasonable suspicion exists that an employee may be under the influence, and as a follow-up if an employee is identified as in need of assistance because of substance misuse. |
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| No UIC employee shall submit a false or fraudulent claim to the United States government for payment or approval. Discussion The civil False Claims Act ("FCA") prohibits the knowing submission of false or fraudulent claims to the United States Government for payment or approval. A claim is any demand for money or property. In other words, any invoice that UIC submits to the Government for payment is a claim. Furthermore, any invoice that UIC submits to a prime contractor for payment under a contract with the Government is a claim. Although the FCA only prohibits the "knowing" submission of a false claim, every UIC employee should understand that the definition of "knowingly" under the FCA is very broad and includes not only actual knowledge that the claim is false, but also includes "deliberate ignorance" of the falsity of the claim and "reckless disregard" of the falsity of the claim. Submitting an invoice for products that deviate from the requirements of a government contract also may amount to a violation of the FCA. For example, submitting an invoice for products that have not been tested as required under a government contract may constitute a false claim and amount to a violation of the FCA. The consequences for violating the FCA are severe. Each violation results in a penalty of $5,500 to $11,000 per false claim, plus three times the amount of the damages sustained by the Government. Each false invoice can be considered a false claim, resulting in a penalty of between $5,500 and $11,000 per invoice. A violation of the FCA could not only amount to millions of dollars, but could also result in the company's suspension or debarment from government contracting, a result that would be devastating for the company and all UIC employees. See Also
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GUIDELINE 36 |
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| Every UIC employee should understand that there is a broad range of potential criminal liability for both individuals and the company for perpetrating fraud against the United States government, conspiring to defraud the government, and obstruction of justice. Discussion There are a number of statutes that impose criminal liability for perpetrating fraud against the United States Government. These laws impose fines and possible imprisonment for criminal false statements, criminal false claims, mail fraud, and wire fraud. It is also common for the Government to allege a conspiracy to defraud the Government, which is a separate and distinct offense from the underlying crime. Finally, there are numerous criminal statutes that prevent the obstruction of justice. With respect to obstruction of justice, UIC employees should be warned that in light of recent corporate scandals and headlines about document shredding, the Government has significantly strengthened the law related to the improper alteration or destruction of records. The zone of circumstances in which criminal liability can attach for document alteration or destruction is now extremely broad.). If any UIC employee suspects the improper alteration or destruction of records, or is asked to alter or destroy records and believes that the request may be improper, he or she should report the matter to his or her supervisor, the Chief Compliance and Ethics Officer, the Law Department or the Ethics Helpline (1-866-825-5483). See Also
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| Section C: Guidelines Relating to International Transactions | |
Each UIC employee shall be responsible for making certain that:
Discussion In accordance with the Foreign Corrupt Practices Act ("FCPA"), UIC strictly prohibits its directors, officers, employees and agents from giving anything of value, directly or indirectly, to a government official, employee or agent anywhere in the world with the intent of influencing any government official's decision or to gain an improper advantage in order to assist UIC "in obtaining or retaining business for or with, or directing business to, any person." In addition and also as required by FCPA, UIC is committed to maintaining proper accounting records for all purposes including international transactions and to having an appropriate system of internal accounting controls. The corrupt practices provisions of the FCPA prohibit a company from authorizing, promising, or offering to pay, directly or indirectly, anything of value to any foreign official or foreign political party, official, or candidate, for purposes of (1) influencing any action (or failure to act) in his/her or its official capacity, or (2) inducing him/her or it to use influence to affect any action of the government involved in order to assist the company in obtaining or retaining business for or with, or directing business to, any person. Payments, authorizations, promises, or offers to any other person are prohibited if there is knowledge or reason to know that any portion of the payment is to be passed along to a foreign official or foreign political party, official, or candidate for a prohibited purpose under the Act. Business transactions with relatives of foreign government officials are particularly subject to scrutiny under this rule. In addition, the award of any subcontract or other contract to a UIC foreign representative (including any person or entity affiliated with a UIC foreign representative) requires the prior written approval of UIC's senior management. Management is responsible for UIC's foreign business practices, including the acts of intermediaries (such as agents, representatives, or distributors), that may make UIC vulnerable to FCPA violations. All agreements with foreign representatives shall require that the representative comply with all applicable laws and regulations of the United States and any country/region in which the representative acts for UIC, including specifically the FCPA. The record keeping and internal accounting control provisions of the FCPA require the maintenance of accurate books and records, and of a system of internal accounting controls sufficient to provide reasonable assurance that transactions are properly recorded, specifically to criminalize the disguising of illegal bribes of foreign government officials in the records of the company. Corporate and individual penalties for violations of this law are severe -- up to a $2,000,000 fine per violation for UIC and up to $100,000 and/or jail sentences for individuals. This is particularly relevant because whether or not the United States government has jurisdiction over UIC's foreign sales representatives, UIC and its employees are vulnerable to enforcement actions for bribes offered or made by UIC's foreign representatives on UIC's behalf (with or without UIC's knowledge or participation). It is very important that anyone with questions in this area contact the Law Department. See Also
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| All exports by UIC shall comply with applicable export control laws and regulations of the Commerce and State Departments. Discussion All exports of products, technical data and services, are subject to either the Commerce Department's Export Administration Regulations (most commercial products) or the State Department's International Traffic in Arms Regulations (primarily military-related and very high technology products). Therefore, all exports to foreign nationals (including any foreign national employed by UIC who has not been lawfully admitted to the United States as a permanent resident), foreign companies and/or foreign governments, including U.S. citizens working for, representing or supporting a foreign entity, (a "foreign party") by UIC employees shall be handled by the UIC Compliance Manager, who shall seek the advice of counsel and technical input as appropriate to ensure compliance with the law. "Export" is interpreted broadly, and includes transfers to a foreign party either in the U.S. or abroad. Technical data includes drawings, manuals, and software, as well as information conveyed orally or by observation such as through a plant tour or product demonstration. Technical data can be exported when a sale includes product training or consulting for foreign customers, and even through casual conversations with foreign nationals. E-mails transmitting technical data must first be encrypted to comply with export control laws, and you should consult with the appropriate Information Technology Department for guidance. UIC employees who work with foreign sales are required to complete the UIC International Business Regulatory Compliance Training and should consult with Traffic and the UIC Manager of Compliance for guidance as needed. See Also
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| UIC employees will not cooperate in any way with any unsanctioned international boycott. Discussion Although covering all boycotts that are not adopted by the United States government, the particular focus of this law is to prohibit compliance with the Arab boycott of Israel. Requests for boycott cooperation may be oral or written and often appear in bid or proposal materials from countries that support a boycott. They often are not obvious, soliciting information, which only suggest that UIC's business associations are not consistent with the boycott. Even letters of credit and shipping instructions may contain such requests. The law requires that all boycott requests, even when they are rejected or deleted, be reported to the United States government. Thus, UIC:
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| Section D: Compliance Programs | |
| A UIC employee having knowledge of any actual or contemplated violation of any of these Business Conduct Guidelines shall promptly report the matter to his/her supervisor, the Chief Compliance and Ethics Officer, the Law Department or the Ethics Helpline (1=866-825-5483). The confidentiality of those reporting violations will be respected to the extent practicable.
Discussion It is important to understand that, in the area of ethics, legal compliance, and integrity, each employee has an obligation to UIC that transcends the normal reporting relationships. To raise a concern or to report misconduct is expected, accepted, and protected behavior. This obligation requires that employees be alert to possible violations of the Guidelines anywhere in UIC and to report such possible violations promptly without fear of retribution for such reporting. The confidence of those reporting suspected violations will be respected to the extent practicable, but employees should be aware that retaliation for reports of potential violations is in all cases forbidden and such retaliation is subject to severe penalties. Not only would UIC consider disciplinary action for retaliation, up to and including dismissal if appropriate, the government also imposes some very specific penalties on companies that retaliate against "whistleblower" employees. Thus, not only the individual, but also the company will be penalized for retaliatory actions. There are several avenues for employees to pursue to verify an action is allowable, question the validity of a contemplated action or to report a potential violation. The important thing is to speak up and ask questions and raise your concerns. Usually the first place to go with questions or concerns is your supervisor. If you do not feel comfortable discussing the issue with your supervisor or if your supervisor does not satisfactorily address your concern, you can discuss the issue with another manager, a department head, the Human Resource Department, UIC's Chief Compliance and Ethics Officer, a member of the Law Department or UIC's Ethics Helpline. The Ethics Helpline (1-866-825-5483) is a 24-hour, seven days a week, toll-free help-line dedicated solely to answering employee questions and concerns under the Business Conduct Guidelines. To further encourage employees to make calls to the Ethics Helpline, your call can be made with anonymity, if desired, as it is staffed by an independent third-party service. Ethics Helpline staff do not identify the gender of the caller, tape record the call or use "caller ID' or other methods to identify the number from which you are calling. When you make an anonymous report to the Ethics Helpline, you will be given a report number to use when you call back to get a progress report or follow-up with additional information. Employees should recognize that reports lacking sufficient information or corroboration make it difficult, and often times impossible, for UIC to address the alleged wrongdoing. Accordingly, any employee reporting a suspected violation is encouraged either to provide for a confidential way to be contacted or to follow-up using your report number to determine if additional information is required or how the matter is being resolved. When requesting feedback on a report, be aware that the Company is bound to maintain the privacy of certain information regarding employees, which may, in turn, limit the information reported back to you. All Ethics Helpline call concerns are forwarded to the Chief Compliance and Ethics Officer for resolution with the appropriate levels of management, up to and including the Board of Directors. See Also
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| UIC has designated a Chief Compliance and Ethics Officer to provide oversight of the implementation of and adherence to these Business Conduct Guidelines. The Chief Compliance and Ethics Officer also serves as the contact for reporting and reviewing of areas of potential concern. All employees should feel free to contact the Chief Compliance and Ethics Officer when they become aware of a potential or actual violation of the UIC Code of Conduct. Discussion It is the responsibility of the Chief Compliance and Ethics Officer to:
The Chief Compliance and Ethics Officer, Jonathan Greenberg, can be contacted at 410-628-3244, e-mail: ethicsofficer@aaicorp.com; mailing address: 124 Industry Lane P.O. Box 126, Hunt Valley, Maryland 21030-0126 |
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| Failure of any UIC employee to comply with the Code of Business Conduct and these Guidelines shall result in disciplinary action. Discussion Violation of the Code and these Guidelines can result in serious consequences for UIC, including substantial fines and restrictions on future operations, as well as the possibility of fines and/or prison sentences for individual officers or employees. Therefore, it is necessary that UIC take strong action to ensure that there are no violations. Enforcement decisions are based upon the perceived ethical or legal failing at issue, and not the immediate dollar value of the transgression. Consequently, heavy penalties may be asserted against UIC for a violation involving a relatively small amount of money. Therefore, UIC employees should not discount possible violations merely because they appear to be of inconsequential monetary value. All violations must be reported to help UIC and affected employees minimize their exposure to penalties. The overall seriousness of a violation will be considered in determining the disciplinary action to be taken against an individual employee. Such action may include:
Disciplinary action may also be taken against supervisors or executives who knowingly condone or permit illegal or unethical conduct by those reporting to them and who do not take corrective action. In appropriate circumstances, disciplinary action may be deemed appropriate even where there was no "knowing" action by a supervisor, but it is determined that an effective supervisor should have prevented or discovered and corrected the illegal or unethical conduct. Finally, illegal acts that injure the company may lead the company to seek damages from, or criminal sanctions against, employees. |
